Reserve Bank of Australia Minutes comparison — 11 August 2026 vs 29 September 2026

This Reserve Bank of Australia minutes comparison covers 11 August 2026 and 29 September 2026. Overall, the newer document was more hawkish. The RBA has shifted decisively from holding at 4.35 per cent with a hawkish warning to actually tightening, lifting the cash rate to 4.60 per cent as the upside inflation risks flagged in August began to materialise, with both meetings unanimous. The September statement keeps a clear tightening bias and explicitly commits to returning inflation to target even if some persistence comes from supply-side forces, so the next meeting is live for another increase…

What changed

More hawkish. The RBA has shifted decisively from holding at 4.35 per cent with a hawkish warning to actually tightening, lifting the cash rate to 4.60 per cent as the upside inflation risks flagged in August began to materialise, with both meetings unanimous. The September statement keeps a clear tightening bias and explicitly commits to returning inflation to target even if some persistence comes from supply-side forces, so the next meeting is live for another increase rather than a pause.

Inflation — More hawkish. The August statement paired anchored long-term expectations with upside risks that staff judged skewed to the upside, but the September statement hardens that into materialised risks — a stronger-than-expected July print, broad cost pass-through, higher oil prices and staff upward revisions to underlying inflation — leaving inflation described flatly as 'too high'.
Labour Market — More hawkish. August described a labour market easing by a little more than expected but still a little tight, whereas September, despite unemployment rising to 4.6 per cent, is dominated by staff questioning whether the unemployment rate consistent with the inflation target is higher than assumed and by resilient business investment showing no near-term weakening in labour demand.
Rate Path — More hawkish. August unanimously held the cash rate at 4.35 per cent with a hawkish conditional bias and only about a half chance of a further hike priced for the year, while September delivered a unanimous 25 basis point increase to 4.60 per cent, noted that market pricing had expected the move and more, and kept explicit language about increasing the cash rate further if needed.
Balance Sheet — Little changed. The August material contains no comparable balance sheet passage, and the September reference is a financial-conditions assessment — restrictive but with the extent of restriction uncertain — rather than any change to balance sheet policy, which also removes financial stability as a constraint on the rate setting.

Key wording

11 August 2026

Measures of longer term inflation compensation in Australia were still consistent with the inflation target.
inflation: Anchored long-term inflation expectations give the RBA room to keep policy on hold without risking de-anchoring.

Members noted that financial conditions in Australia had tightened in response to three increases in the cash rate in 2026 and were now judged by the staff to be somewhat restrictive.
rate path: Staff judgment of restrictive conditions signals board likely to hold rates steady, limiting near-term tightening odds.

The current cash rate target was at the top of the range of model- and market-based central estimates of the nominal neutral rate.
rate path: Cash rate at top of neutral range suggests policy is no longer stimulus-like, reducing urgency for further hikes.

Pricing implied that market participants saw little prospect of an increase in the cash rate target in August and around half a chance of a further 25 basis point increase by the end of 2026.
rate path: Market pricing implies a high probability of a pause in August, aligning with consensus for a hold.

Most market economists expected no further increase in the cash rate target, though a small number still expected another increase would be needed to stem persistent domestic inflation pressures.
rate path: The minority expecting another hike highlights upside inflation risk that could force a resumption of tightening if data disappoints.

By contrast, underlying inflation, as measured by the trimmed mean, had increased to 3.6 per cent in the quarter, only slightly lower than expected.
inflation: Underlying inflation remains well above target, reinforcing the case for a restrictive policy stance.

29 September 2026

In Australia, market expectations for the cash rate target had also risen since the previous meeting, though by less than in some other countries. This followed stronger-than-expected data on inflation and activity in Australia, higher oil prices and recent RBA communication.
inflation: Attributes the repricing to upside inflation/activity surprises and the RBA's own communication, signalling the Board has shifted the reaction function toward tightening.

Market pricing implied an expectation that the cash rate target would be increased at this meeting, followed by an additional increase of around 15 basis points by the end of the year and another 30 basis points in the first half of 2027. All surveyed market economists expected an increase in the cash rate target at this meeting and several expected a further increase later in the year.
rate path: Extreme market consensus for a hike here plus ~45bp of further tightening priced is the bar the Board must clear or disappoint.

Model-based estimates of the neutral cash rate implied that the current stance of policy was somewhat restrictive. The cash rate was around the top of the range of central estimates from these models, while the market-implied future path lay above that range.
rate path: Board reads the existing stance as only 'somewhat' restrictive and the priced path as above neutral estimates, i.e. little room to argue policy is already tight enough.

Members considered the tentative signs that the neutral rate in Australia had again shifted higher, having already moved up materially since the pandemic, to be above where it was when the cash rate was previously at its current level. However, members acknowledged that estimates of neutral were highly uncertain and therefore did not provide a direct guide for monetary policy.
rate path: A higher neutral rate curbs the case for cuts at the current cash rate, though the disclaimer limits how hard this can be leaned on.

Summing up, members agreed that the considerable resilience of borrowers and financial institutions in Australia implied that financial stability considerations were not currently constraining the setting of monetary policy.
rate path: Removes financial stability as a constraint, allowing policy to focus on high inflation.

Members assessed the signal from the July inflation data, which had been stronger than expected, particularly for market services. Members noted that these data had led the staff to expect higher underlying inflation in the September quarter than had been forecast in August.
inflation: Explicit upward revision to near-term underlying inflation forecasts is the key hawkish input for pricing the next move.

Official documents

Background reading

Earlier meeting · Later meeting · Previous comparison · Methodology